Jim Lowell ’79, P’15: A Positive Take on America’s Future

We caught up with him recently and found a bit of optimism in his outlook for America’s financial future.

When the Riparian interviewed you in 2002, the market was reeling in the aftermath of 9/11. Where are we today?
The current crisis is unprecedented in scope and scale. It has shaken not simply companies and even industries to their core, but it has underscored a pervasive sense of helplessness and hopelessness which has shaken investors to their core beliefs in investing. It is not the belief that Capitalism has hit an iceberg, it is more sense that perhaps Capitalism was the iceberg to begin with. Nothing feels safe. No assumptions are secure. It is, as the German Romantic philosopher G.W.F. Hegel once quipped, “The night in which all cows are black.” That being the case, I take solace from history’s unyielding desire to repeat itself; better days will turn up. Between now and then, I’d recommend watching the news with the sound off and taking any sound bite about our current predicament with more than a grain of salt. Put it another, more hopeful way—Holderlin, in his poem Patmos, proposes, “Wo aber Gerfahrist, wachst/Das Rettende auch”—where danger lies, there the saving ground presents itself.

Has your own “belief system” in investing changed drastically?
Since my awakening at Rivers in 1977, my own belief system continues to evolve; the market has a random chance of uplifting or upbraiding my views, no matter how well considered they are. I’m a staunch advocate of diversification among types of investments across different asset classes to better account for the fact that today’s sage is often tomorrow’s fool. I have also always focused at least as much of my time and attention on managing risk as I have on delivering return. I enlist a unique tool and perspective in my pursuits: one of my companies holds the largest proprietary database of individual manager track records. This database allows me to answer a key question: which managers have (or lack) the skill sets to manage whatever environment we’re in. Currently, I’m focused on managers who weathered the 1989-1992 real-estate led banking crisis and resultant market meltdown well. Cleverness and luck are haphazard. Knowledge, intelligence, and experience matter.

Overconsumption has received its share of the blame, and yet we’re told to start buying again to get the economy going? Where’s the healthy balance?
We’re witnessing the convergence of several types of overindulgence and the desire to first control then better manage them. Whether it’s our culture’s ironic obsession with obesity and celebrity chefs, or Washington’s command for obeisance to fiscal conservatism and profligate stimulus, or Wall Street’s projection of prudence and pell-mell pursuit of profits, a healthy balance is hard to find. In such moments of imbalance, however, we all learn the necessity of balancing acts as opposed to merely acting balanced. That’s a healthy inclination. At the end of the day, I believe that we’ll be in better shape for having gone through this current crucible. Meister Eckhardt’s plaint that ‘pain is the quickest beast to carry you to perfection’ rings true. So does Chevy Chase’s Ty Webb quip in Caddyshack, “A flute with no holes is not a flute;” the sour, sub-prime note of products that claimed to be one thing, turning out to be nothing, are nothing new. Neither is the fact that good and bad policies may get unjustly punished or rewarded; that’s politics. But the bottom line for investors will be that good companies will survive based on being able to balance, rather than cook, their books. And, as my daughter knows thanks to her 6th grade Latin teacher, Ms. Favreau, caveat emptor.

You are a student of religion, attuned to morality and ethics. How do you reconcile this inclination with being in a profession where people seem to be increasingly unethical?
I have never seen a separation between Capitalism and morality, which is not the same thing as saying that I have never seen immoral and/or unethical capitalists. I don’t wake up thinking ‘today I will make money and that will make me a better person’ anymore than I might think that if I am a better person I am more likely to be a better money manager. Crooks have to live with themselves just like we do, and if conscience isn’t a good guide, it will be the bars which tax the soul even if one lives scot free. If ethics can be viewed as a code of conduct for a community, and morality can be viewed as the mannered expression of that code among that community’s members, then history has only revealed the indominatable desire for, and the imperfect of achievement of, a state of either in any construct: religious, political, social, economic. Greed has its converts, fear has its adherents, power its proponents. Ideology and idolatry are always clapping. The current cult of personality, which seeks to elevate or scapegoat individuals and misalign stereotypes with archetypes, feels as democratic as a coronation at a witch trial. Matthew 10:36: The foes shall be they of your own household.

Americans hear about impact on the US and other major markets, but do you think they realize the effect this situation is having on third world countries?
Global growth and global risks are two sides of our age’s coin. It’s hard to put that coin into an ethical jukebox and not hear the blues. There have been such significant advancements in human care from cultural awareness to major pharmaceutical treatments that it is nearly overwhelming to see how uncaring and inhumane the treatment of whole populations still can be. Now, with the health of the most powerful countries in the world in question, the concerns of uplifting the downtrodden are vulnerable to being downtrodden themselves. But, as has always been the case, our unique strength as a country is that we are, in the main, a composite of those who once were downcast and downtrodden. We have more than an educated notion of doing the right thing; we have an ingrained, empathetic understanding of helping not only our neighbors but those completely unrelated to and geographically far removed from us. Americans are strongest in times of greatest weakness. We give no quarter to failing to pursue inalienable rights for all.

Do you keep your poetry writing separate from your business writing?
On the surface, I suppose I look like Yeat’s swan – calm and collected and gliding on an air of certainty. But, like Yeat’s swan, I’m mostly tumult and business underneath. The tumult is born of being open-eyed and open-minded in a world often motivated by and celebratory of blinders. Sometimes, I’m moved to champion what I see, other times I feel compelled to challenge what’s there, sometimes I watch football with a passion that would make a crow blush – and if my passion didn’t make that crow blush, my vocabulary would. I don’t make a big distinction between writing about the world while investing in it and investing in the world while writing in it. I do think that the markets have rhythms all their own; it’s my job to be attuned to them. I do think that writing poetry is part of my own rhythm – as I go on, that beat goes on, and vice versa. Interestingly, what moves me to invest in writing, and through writing to invest, is the existential enjoyment I derive from the infinity of my finitude—what the pre-Socratic philosopher Heraclitus phrased as not being able to step in the same river twice. I’ve never stepped into the same market twice. I’ve never stepped into the same poem twice. I’m certainly not stepping in the same Rivers today with my daughter as when I was fortunate enough to be here before. Yet, I enjoy the ability to appreciate distinct moments equally as much and have yet to tire of trying to better comprehend and express what being a part of such rivers means to and for me, sink or swim.